Waters – All Hail Innovation: Defending high-frequency trading

It used to be the market-makers and specialists who took the brunt of broker complaints that prices were fixed and the market was inefficient. Now, most of them are gone, so high-frequency trading firms are in the spotlight. Making markets is about gathering information quickly and making decisions based on that information faster than the competition. For high-frequency traders, that means seeking out millisecond inefficiencies and trading on them in microseconds.